Britons could soon see major changes to how they make contactless payments, with regulators reviewing current limits and security measures.
The potential shake-up could impact everyday spending, with discussions underway on whether adjustments are needed to better support consumers and businesses.
The City regulator is seeking views on whether removing or increasing the £100 contactless card limit could benefit households, businesses and economic growth.
The Financial Conduct Authority (FCA) has launched an “engagement paper” as part of work announced in January in a letter to Prime Minister Sir Keir Starmer to support growth.
One option being considered is to allow firms using enhanced fraud control technology to set their own limits, similar to practices in the United States.
Any changes would need to support good customer outcomes as required by the Consumer Duty rules, the FCA said.
Many retailers have all launched card-only retail outletsPACurrently, 85 per cent of people in the UK make contactless card payments each month.
The regulator emphasised that existing legislation requiring firms to reimburse consumers in cases of unauthorised payment fraud would remain in place. This includes situations when cards are lost or stolen.
The review forms part of broader efforts to improve and increase trust in the UK’s payments system.
David Geale, executive director of payments and digital assets at the FCA, said: “Currently 85 per cent of people in the UK make contactless card payments each month.
“This is the perfect opportunity to explore whether we can improve and increase trust in the UK’s payments system.”
Emma Reynolds, Economic Secretary to the Treasury, said: “The FCA’s review of the contactless payment limits, including removing the £100 limit on individual payments, is a welcome step to ensure that families can safely benefit from more flexibility when making purchases.”
The FCA’s review comes as contactless payments continue to grow in popularity across the UK
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Feedback to the engagement paper closes on May 9 this year.
Jana Mackintosh, managing director, payments and innovation at UK Finance said: “We welcome today’s announcement from the FCA seeking views on how we can improve payments.
“Having a contactless limit is important in terms of fraud prevention, but we believe overall limits and the number of times a customer needs to enter a Pin should be determined by industry rather than the regulator.
“Banks know their customers and can strike the right balance between protecting them and giving them fast and secure payment options.”
The FCA’s review comes as contactless payments continue to grow in popularity across the UK.
Currently 85 per cent of people in the UK make contactless card payments each month
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Industry experts suggest that increasing or removing limits could further streamline everyday transactions for consumers.
However, balancing convenience with security remains a key consideration.
The regulator’s engagement with stakeholders reflects a collaborative approach to modernising payment systems.
With feedback closing in May, any potential changes would likely be implemented later this year, following thorough consideration of public and industry responses.